The Philadelphia School District is poised to pay a Cherry Hill firm up to $34 million to provide substitute teachers for its classrooms over two school years.

Expected to be enacted later this month, the move to privatize 1,324 jobs will save the school system $10 million annually and mean fewer lost learning opportunities for students, officials said.

But the action has already ignited controversy.

Outraged over the outsourcing of substitute spots and other positions now held by its members, the Philadelphia Federation of Teachers has planned informational pickets for Friday. All per-diem and long-term substitutes are now unionized.

"We are exploring all legal options," PFT president Jerry Jordan said. "I will consult with our attorneys before the day is over."

Jordan said the district manufactured a substitute crisis with a goal in mind.

"They did not want to solve the problem," he said. "They want to privatize."

The PFT and the district are in a unique, uncomfortable spot. Last fall, the School Reform Commission voted to cancel the teachers' contract, a move that was shot down in Commonwealth Court and is being considered by the state Supreme Court.

In the meantime, the sides are nominally negotiating a new contract - though bargaining sessions have not been held in months.

In addition to privatizing substitute services, the district is also exploring outsourcing school health services, including nearly 200 nurse positions. That measure will be considered later.

Naomi Wyatt, the district's human resources chief, said Cherry Hill-based Source 4 Teachers, which provides substitutes to school districts around the country, submitted the winning bid. The SRC is scheduled to vote on the contract this month.

Substitute services, now managed by the district, cost Philadelphia schools $18 million annually.

On average, just 64 percent of district sub jobs available are filled. Last year, about 42,000 sub spots went unfilled, leaving schools scrambling to cover classes.

Subs are paid between $47.63 and $160.10, depending on certification and days worked.

Source 4 Teachers' contract guarantees a 90 percent fill rate at a projected cost of $15.9 million annually by January 2016. If the district matched that, it would spend $27 million a year, Wyatt said.

The firm would be subject to penalties if it did not meet standards on quantity and quality of subs.

Current district substitute teachers in good standing will be eligible for employment through Source 4 Teachers, which would set their pay rates, officials said.

Philadelphia would be Source 4 Teachers' largest contract, but it already handles other urban school systems' substitute services, including Camden's, Wyatt said.

"They have a strong footprint already," Wyatt said. "Between the people they have already working in Montgomery or Bucks or Delaware Counties, we really were most confident in their ability to have enough people in their pool."

Source 4 Teachers will set the substitutes' pay rate.

Wyatt said that Source 4 Teachers subs will have health-care benefits and bonus opportunities, and be eligible to collect unemployment during summer months, a perk that substitutes are not currently eligible to receive.

The three district workers who now handle substitute services will be employed at least through the summer, and will be interviewed for other positions in the district. One person would likely be retained to manage the agreement with Source 4 Teachers, Wyatt said.

In a statement, Source 4 Teachers said it was eager to begin work in Philadelphia.

"This partnership will put qualified teachers in Philadelphia students' classrooms, expand and create new opportunities for substitutes, and provide the district with a solution to a significant problem in education," spokesman Owen Murphy said.